Hello I have an economics math graphing question, I have done the first part of the question, if there is anything I can fix please let me know, but I need help figuring out if at an output level of $450 billion, aggregate expenditure will be (less than or greater than or equal to?) real GDP and firms will experience (an unplanned decrease, unplanned increase, or no change?) in business inventories. Firms will respond to this situation by: (Increasing Production, or Decreasing Production, or Leaving production unchanged?) Also where to plot the the blue line (circle symbols) to show the economy's aggregate expenditure line, (C + I), after the increase in investment. Then use the gray point (star symbol) to show the economy's new equilibrium output. Dashed drop lines will extend to both axes and what is the simple spending multiplier for this private closed economy is (1 or 4 or 2.5 or 20 or 10 or 5 or 2?)
Here are the images of the question below (:
3. A graphical approach to equilibrium GDP in a private closedeconomy The following graph shows the consumption function (C) for a hypothetical private closed economy and a 45degree line along which aggregate expenditure equals real GDP (AE=Y). Recall that a private closed economy does not have government and does not trade with the rest of the world (so G=0 and (XM)=O). In a private closed economy, real GDP is equal to disposable income. At the current real interest rate, the level of investment in this economy is equal to $25 billion at each level of real GDP. Use the blue line (circle symbols) to plot this economy's initial aggregate expenditure line, (C + I). Then, use the black point (X symbol) to indicate this economy's initial equilibrium output. Dashed drop lines will automatically extend to both axes. (Hint: You can see two of the coordinates along the consumption function by mousing over the green triangles on the graph.) G) 800 750 700 650 600 550 500 0 Aggregate Expenditure r 450 + 400 350 300 250 200 150 100 Aggregate Expenditures 0 100 200 300 400 500 600 700 800 Real GDP At the level of equilibrium output you just indicated, the level of saving is equal to $25 billion V . At an output level of $550 billion, aggregate expenditure will be less than V real GDP and firms will experience an unplanned increase V in business inventories. Firms will respond to this situation by: 0 Increasing production Decreasing production 0 Leaving production unchanged At an output level of $450 billion, aggregate expenditure will be less than V real GDP and firms will experience an unplanned increase V in business inventories. Firms will respond to this situation by: Increasing production 0 Leaving production unchanged 0 Decreasing production Suppose the real interest rate falls and the level of investment in this economy increases by $25 billion. Use the blue line (circle symbols) to show the economy's aggregate expenditure line, (C + I), after the increase in investment. Then use the gray point (star symbol) to show the economy's new equilibrium output. Dashed drop lines will extend to both axes. Hint: Start with your aggregate expenditure line from the previous graph. Make sure the slope of the aggregate expenditure line is the same as the previous aggregate expenditure line you just plotted. You can check the slope of the line by clicking on the line after you plot it. C?) 800 750 o 700 650 Aggregate Expenditure with higher real interest rate 600 550 Iy 500 450 400 350 300 250 200 1 50 Equilibrium with higher real interest rate Aggregate Expenditures 1 00 50 0 100 200 300 400 500 600 700 800 Real GDP The simple spending multiplier for this private closed economy is V
